Sat Phone Company TerreStar Files Chapter 11

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Our dreams of a satellite phone-infused future may have just been vanquished—at least for now. TerreStar, the space satellite hosting company for sat phone service, just filed for Chapter 11 bankruptcy, HotHardware.com is reporting.

Normally, this would be a story for a pretty niche market. But TerreStar had hopes of bringing satellite phone service to a more mainstream business and even consumer audience. The AT&T Genus, the first combination satellite and cellular smartphone, just became available a few weeks ago—and already, the phone’s future is now in jeopardy.

With a single tap, the phone switches between satellite and terrestrial cellular networks. That means a Genus owner could use it as a regular inexpensive smartphone most of the time, and then switch over to the (much more expensive) satellite network just for those moments when regular connectivity wasn’t available.

Granted, the Genus isn’t exactly a bargain device for customers looking at low-end feature phones. At $799, AT&T was focusing its sales efforts on business and government customers with corporate accounts, at least in the beginning.

But as the article reports, while the Genus probably appealed only to those few traveling to remote regions, TerreStar and a dozen of its affiliates have now sought protection from their creditors ahead of what was to be a major mainstream market push.

“Filing chapter 11 was a necessary and prudent step to strengthen our balance sheet and gain financial flexibility in order to access liquidity and position TerreStar Networks as a stronger, healthier company,” company CEO Jeffrey Epstein said in the report.

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